Risk-Based Homeland Security Spending

Risk-Based Homeland Security Spending

The Department of Homeland Security has changed the way it awards funds to cities. The question now is whether the new program will make America’s cities safer.

February 8, 2006 3:37 pm (EST)

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Last month, after mounting complaints that politics was skewing the way homeland security funds are apportioned, Homeland Security Secretary Michael Chertoff announced a change in the way funds will be distributed through the Urban Area Security Initiative (UASI). In past years, funds were distributed based on population and regardless of threat assessments and other counter-terrorism considerations. But this year, grants will be awarded to areas experts regard to be most at risk of attack and most in need of the money.

In addition, the new approach puts an increased emphasis on regional cooperation between adjacent urban centers: The thirty-five urban areas eligible for UASI grants encompass ninety-five cities. Under the old system Oakland, San Francisco, and San Jose, California, could only apply for and receive funding separately. Now, in order to receive grant money, the three cities and their surrounding communities must submit a joint proposal as the Bay Area. Experts say this is an improvement on the previous system because it encourages adjacent cities to coordinate their security strategies, forces collaborative disaster responses, and helps eliminate redundant spending.

What was wrong with the old method of distributing funds?

In the past, critics of DHS spending bemoaned wasteful expenditures. The most outrageous examples included the purchase of a fleet of Segway scooters for a bomb squad in Santa Clara, California, and the commissioning of a homeland security rap song to raise awareness of children in Washington, DC. Experts say the ill-conceived distribution of funds was largely to blame.

The old distribution plan—drawn up by Congress—doled out funds using a population-based formula. Seizing an opportunity to funnel DHS dollars to their constituents back home, representatives from less-populated states ensured each state would receive a minimum amount. The results of this policy included a $557,400 grant awarded to North Pole, Alaska, to buy rescue and communications equipment to protect the town’s 1,700 residents. In another instance, the sleepy Wisconsin county of Outagamie, population 165,000, received half a million dollars to buy chemical suits, rescue saws, disaster-response trailers, emergency lighting and a bomb disposal vehicle.

The new, risk-based funding program does not need to go before Congress, and will therefore avoid the political pitfalls that handcuffed the old system. In a 2004 evaluation, the 9/11 Commission criticized both Congress and DHS for wasteful spending and called for the risk-based distribution of funds. In announcing DHS’ new policy, Secretary Chertoff said, "We’ve incorporated changes to take account of those criticisms."

What kind of budget does DHS have for the new grants?

The $765 million allocated for UASI grants this year is about $120 million less than last year. The grants are not intended as subsidies for local security programs, but are designed to defray the often one-time costs cities and states incur when ensuring a minimum level of preparedness. For this reason, "previous spending is not a measure of what current spending should be," says James Carafano, senior fellow at the Heritage Foundation.

UASI grants only represent a quarter of the total $2.5 billion the DHS has available for state and local counterterrorism programs in 2006. Yet a Congressional mandate requires nearly $1 billion of these funds be distributed evenly among the fifty states regardless of risk. "Overall, it doesn’t show a great deal of seriousness," says Stephen Flynn, CFR’s Jeane J. Kirkpatrick senior fellow for national security studies. Not all experts share Flynn’s skepticism about the new approach. Overall, Carafano says the new legislation is "definitely a step in the right direction and it’s a fairly important step."

What is the process for determining risk?

The thirty-five urban areas eligible for UASI grants must submit proposals outlining their existing capabilities and vulnerabilities, as well as an explanation of how the grant money would help improve security. DHS will review the applications, considering each area’s existing preparedness level and whether increased funding will improve security in the area. The department will also consider an objective assessment of risk in each urban area by using a preexisting database that includes the number of high-profile targets like government buildings and bridges, as well as the size and ridership of a city’s public transportation system. The prioritization of funding will be based on this assessment. While generally praising the program, Michael Greenberger, director of the University of Maryland’s Center for Health and Homeland Security, says he is concerned the application process "is overwhelming and highly bureaucratic," such that the "policy could fail under the weight of its own underpinnings."

What areas are likely to receive more funding as a result of this change?

It’s difficult to say. Obviously, cities at a greater risk of terrorist attacks will receive greater levels of funding. New York City received $207.5 million in 2005; were it to receive more than that it would certainly cut into the funding other cities receive, especially given the reduction in total UASI funds available. Another factor under the new guidelines is need: whether an urban area’s capabilities match the preparedness guidelines established by DHS. Experts say it is possible that a lower risk, under-prepared city could be awarded more money than a higher risk, well-prepared city.

Distribution of funds will greatly depend on city officials’ ability to navigate the new bureaucratic application process, an ability that cannot be predicted. But after looking at DHS’s criteria for prioritizing funding, Carafano predicts more money will be spent in major population centers, particularly on the East, West, and Gulf coasts. Central plains states, he says, will likely see a drop in funding.

Will the new approach have much impact?

Most experts agree that funneling funds to the areas most in need is a wise move, but skepticism remains about the new policies. "We’re talking about a very small amount of resources," Flynn says, "it’s a baby step in the right direction." Though the UASI dollars may have limited reach, Greenberger disagrees. He says the new policy "is going to have a dramatic impact," representing a real shift in the way DHS distributes funds. In his January 3 press conference, Chertoff described that shift: "As we get disciplined, as we focus on the reality of what we’re trying to protect ... we’re going to increasingly be looking to regional approaches, cooperative approaches, and approaches that put politics to one side and talk about real tangible things like risk."

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